VNOM - 3 Low-Risk High-Reward Dividend Stocks to Hold Long-Term

2024-06-03 06:00:00 ET

InvestorPlace - Stock Market News, Stock Advice & Trading Tips

Generally speaking, low-risk dividend stocks have a direct correlation with their reward profile. Stated differently, if you’re looking for something with low volatility, you’re likely going to extract low yields.

However, the market features thousands upon thousands of publicly traded ideas. It’s inevitable that a few gems fall through the cracks. Certain enterprises feature an inverse relationship: (relatively) small dangers in exchange for robust yields. If you’re feeling adventurous, check out these low-risk dividend stocks that offer big passive payouts.

Shutterstock (SSTK)

Based in New York City, Shutterstock (NYSE: SSTK ) falls under the communication services space. Specifically, it operates in the internet content and information realm. Per its public profile , Shutterstock provides a platform to connect brands and businesses to high-quality content in North America, Europe and international markets.

To be sure, SSTK stock has been volatile this year. However, it’s also possible that the idea has been substantially de-risked. That’s because with the burgeoning gig economy – particularly for the creatives space – there is room for growth. In the trailing 12 months ( TTM ), sales came in at $873.62 million.

For the current fiscal year, analysts are seeking revenue of $941.49 million. If so, that would represent a 7.65% growth rate from last year’s haul of $874.59. Further, Shutterstock might post earnings per share of $4.49. That would be a gargantuan leap from 2023’s earnings of $3.04 per share.

As for passive income, Shutterstock features a forward dividend yield of 3.16% . Notably, the payout ratio is under 30%, implying greater confidence regarding yield sustainability. Thus, SSTK is one of the low-risk dividend stocks to buy.

Viper Energy (VNOM)

Headquartered in Midland, Texas, Viper Energy (NASDAQ: VNOM ) falls under the oil and gas midstream component of the energy value chain. Midstream operators focus on the transportation and storage of hydrocarbon assets. Per its corporate profile , Viper owns and acquires mineral and royalty interest in oil and natural gas properties in the Permian Basin.

In the charts, VNOM has performed quite well this year. Fundamentally, that may be expected due to the reality that the world still runs on oil. Further, many consumers have gravitated toward combustion-based hybrid vehicles. That may allow midstream operators to enjoy a longer-than-expected relevancy runway. During the TTM period, Viper posted net income of $209.48 million on sales of $864.13 million.

For 2024, analysts are looking for EPS of $2.18 on sales of $882.31 million. That’s a bit of a mixed result considering last year’s print of $2.69 EPS on sales of $827.7 million. However, the high-side target calls for earnings of $2.60 per share on revenue of $948.1 million.

For passive income, Viper offers a dividend yield of 5.35%, although the payout ratio is a bit steep at 75.6%. Still, it’s worth a look for relatively low-risk dividend stocks to buy.

Civitas Resources (CIVI)

Based out of Denver, Colorado, Civitas Resources (NYSE: CIVI ) falls under the oil and gas exploration and production segment, also known as upstream. According to its public profile , Civitas focuses on the acquisition, development and production of oil and natural gas in the Rocky Mountain region. It also holds a financial interest in production wells.

Fundamentally, geopolitical flashpoints raging across the world present a cynical argument for CIVI stock. Western nations and their allies need access to reliable sources of hydrocarbons. However, with so much of the supply coming from jurisdictionally unstable areas, domestic upstream players could rise in prominence. During the TTM period, Civitas posted a net income of $757.65 million on sales of $4.15 billion.

Analysts believe that by year’s end, EPS could hit $12.50, up almost 39% from last year’s print of $9.02. On the top line, sales could rise to $5.6 billion, up just under 61% from 2023’s tally of $3.48 billion.

For passive income, Civitas offers a dividend yield of 8.15% with a reasonable payout ratio of 44.84%. With that, it’s easily one of the low-risk dividend stocks with big yields.

On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines .

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